Lucid Motors has had a decisive start to the year for its future as a competing automaker to Tesla. Its timeline called for its very first electric car to begin marketing in the spring, and Bloomberg announced on Jan. 11 that Lucid would merge with Special Purpose Acquisition Company (SPAC) Churchill Capital IV, in order to go public.
The Californian firm’s commitment to the capital market was later formalized by its boss, Peter Rawlinson, in an interview with the same news agency. Almost a month after the first dispatch revealing the details of the operation between Lucid Motors and Churcill Capital IV ($ CCIV), many shareholders had already rushed to the title, pending the merger.
Not everyone knew, until then, that Bloomberg’s first Jan. 11 report was completely bogus. Of the five different special purpose acquisition companies Lucid Motors was discussing, Churchill Capital IV was not on the list … While the CCIV share gained more than 90% in the month of January, neither the SPAC nor the manufacturer had considered discussing an operation together.
Bloomberg’s fake news, kept secret
Bloomberg was wrong, and yet, in February, Lucid Motors was not contradicting the agency. The revelation of the whole affair could be made with a recent file sent by the manufacturer to the SEC (the S-4 form), containing several information hitherto confidential, in particular on the chronology of the events preceding the IPO. .
Our brothers and sisters of Motley fool published the passage of the file written by Lucid concerning the agency and its SPAC: “On January 11, 2021, Bloomberg published an article indicating that Churchill was in discussions to acquire Lucid. However, at the time of publication of the article, Churchill and Lucid had not had any discussions regarding a possible business combination ”.
The rest is just as perilous. With this erroneous report, Bloomberg forced talks between the two companies, when Churchill Capital IV was initially created with the aim of merging with an entirely different company: the subsidiary DIRECTV, of AT&T. “Following the Bloomberg article, Churchill began to explore a possible business combination with Lucid due to his interest in the electric vehicle industry,” confirms Lucid Motors in its report.
On February 10, when the title of CCIV had already gained more than 227%, Bloomberg returned to the attack with a new dispatch on the merger of Lucid Motors with Churchill Capital IV. A week later, the agency relied on sources close to the automaker to confirm that the count had been launched before an IPO on NASDAQ. CCIV was at its highest, having gained 427% since the start of the year.
Lucid Motors in trouble?
On its last session, the price of Churchill Capital lost more than 7%, prolonging the correction started on March 16, which led the PSPC to lose more than 27% on its price. With this news, shareholders should not be very confident about the future. PSPCs already have the drawback of not offering very high visibility for investors, unlike traditional introductions, such as takeover bids (takeover bids).
Since the Bloomberg report of January 11, then the confirmation in February, the IPO of Lucid Motors has added additional pressure on it to have to defend its seriousness and stick to its schedule to market. The sooner the better: the CEO of Lucid Motors postponed the marketing of the Lucid Air (his first model) until the second half of the year, when the electric car was due to be launched in the spring.
The automaker must fight to maintain confidence ahead of its IPO. Communication around the brand has accelerated. Recently, we could see a video on Lucid Motors’ YouTube channel where its CEO showed off the qualities while trying out a prototype. A partnership with Dolby Atmos was also unveiled.
What is enough to forget the rough journey of the brand to reach Wall Street? Investors know it: e-mobility startups can achieve success like Tesla, but also nightmare, like Nikola Motors.
It’s hard to predict when Lucid Motors will merge with its SPAC, and list on the NASDAQ. The horizon is no longer very clear when the last mentioned valuation, of 24 billion dollars, is no longer relevant.
Behind the present correction of Churchill Capital IV, the future shareholders of Lucid Motors have withdrawn in droves. Unanimously, the analysis firms warn about the unreasonable projection of the weight of the builder on the stock market.
At $ 24 billion valuation, Lucid Motors would be estimated at more than 5 times what its announced sales for 2022 forecast. The overestimation also continues on the figures announced by the company for 2023, which would be twice too optimistic.